Sensex, Nifty Plunge As Rising Covid-19 Cases Stoke Growth Fears

The Indian equity benchmarks plunged on Monday as rising Covid-19 cases and fresh curbs in Maharashtra sparked worries about the pace of the country’s economic recovery, analysts said. The Sensex fell as much as 1,449 points and Nifty 50 index tumbled below its important psychological level of 14,500, the index dropped as much as 408 points at the day’s lowest level. The country’s coronavirus caseload jumped by more than 1 lakh to surpass 12.5 million on Monday. Maharashtra imposed stringent curbs including a complete lockdown on weekends.

The Sensex ended 870.51 points or 1.74 per cent lower at 49,159 and Nifty 50 index dropped 230 points or 1.54 per cent to settle at 14,638.

“The market had run up on the back of the opening up of the economy, and the resultant increase in demand. That entire story is again at risk,” said Siddharth Khemka, head of retail research at Motilal Oswal Securities in Mumbai.

“The concern, from a market perspective, is that the virus is spreading so fast and people will not be able to work, and business and profitability will be impacted.”

Selling pressure was broad-based as nine of 11 sector gauges compiled by the National Stock Exchange ended lower led by the Nifty PSU Bank index’s nearly 4 per cent decline. Nifty Bank, Financial Services, Private Bank and Realty indices also fell over 3 per cent.

On the other hand, information technology and metal stocks witnessed buying interest. IT stocks witnessed buying interest on hopes of better earnings as work from home concept during the ongoing Covid-19 pandemic forced companies to increase their spending on information technology infrastructure which hugely benefitted the IT companies, analysts added.

Mid- and small-cap shares faced selling pressure as Nifty Midcap 100 and Smallcap 100 indexes fell over 1 per cent.

Bajaj Finance was top Nifty loser, the stock dropped 6 per cent to close at Rs 4,969. IndusInd Bank, State Bank of India, Eicher Motors, Mahindra & Mahindra, Bajaj Auto, ICICI Bank, ITC, Axis Bank, HDFC, Bajaj Finserv, Larsen & Toubro, HDFC Bank and Indian Oil also fell between 2.4-5.5 per cent.

On the flipside, HCL Tech, Wipro, Britannia Industries, JSW Steel, Shree Cement, Bharti Airtel and Adani Ports were among the notable gainers.

The overall market breadth was negative as 1,896 shares ended lower while 1,059 closed higher on the BSE.

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